Sensex Edges Higher, Wipro Slumps 4% After Forecast Disappoints

Shares of IT services major Wipro fell nearly 4 per cent today.

Sensex was up 31 points at 34,532 while Nifty edged higher to 10,580. Shares of IT services major Wipro fell nearly 4 per cent today. On Wednesday, the Sense and Nifty had closed lower, snapping a two-day winning run.

The rupee was trading higher at 66.84 per dollar today. On Wednesday, the rupee today nosedived 52 paise to hit a 14-month low of 66.90 against the US dollar, the third biggest single-day fall for the domestic currency this year.

Wipro, India’s third-biggest software services exporter, forecast weak growth in revenue during the current quarter after two clients went bankrupt.

Bengaluru-headquartered Wipro said on Wednesday it expected revenue from its key IT services business to be in a range of $2.02 billion to $2.07 billion in its fiscal first quarter to end-June as it reported a bigger-than-expected fall in fourth-quarter net profit.

That would mean a fall of 2.3 per cent to a rise of 0.1 per cent from the $2.06 billion revenue it posted in the March quarter.

Asian stocks rose on Thursday as robust corporate earnings helped Wall Street quell concerns about the surge in US bond yields. MSCI’s broadest index of Asia-Pacific shares outside Japan bounced back from three-week lows plumbed the previous day and gained 0.35 per cent.

The Dow rose 0.25 per cent overnight, ending a five-day losing streak, and the S&P 500 gained 0.18 per cent on optimism over a spate of upbeat earnings that managed to offset jitters over rising US bond yields.

The spike to a four-year peak above 3 percent in the 10-year U.S. Treasury yield this week – a benchmark for global borrowing costs – had weighed on stocks amid concerns rising corporate borrowing costs could dampen profits.

Nonetheless, the broader equity market reaction to the latest jump in U.S. yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling.

“The equity markets slid sharply in January and March in response to the rise in Treasury yields. But the Federal Reserve signalled in March that its rate hikes would be gradual,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“Expectations towards US rate hikes being gradual are enabling equities to take the current yield rise in stride.”

The 10-year Treasury note yield rose to 3.035 percent overnight, its highest since January 2014. The yield has climbed on expectations of a steady US economic expansion, accelerating inflation and concerns about increasing debt supply.

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